The cryptocurrency space is unregulated, and relies on individuals and communities to do due diligence themselves to make sure they arn’t trusting their precious coins to unscrupulous players.In that spirit, we have compiled information on the most prominent exchanges so you are better informed about who you are doing business with.

Coinbase

Coinbase is an American online wallet and exchange. Though they claim they are open to customers around the world, their service only works well for American customers as they allow them to link their bank accounts to their online wallets, and hence can easily deposit and withdraw their funds.Their domain is registered as follows:Coinbase, Inc548 Market Street, #23008San FranciscoCA94104USAThey were founded in June 2012 and have raised a massive $106 million in venture capital.They registered with FinCen in 2013 and are trying to get state approval – according to their blog they are now approved in 24 different states.As is the case with all FinCen regulated companies, their verification is tough (you are required to upload documents and they do credit checks), and they will also close any accounts that look to be sending or receiving bitcoins from businesses that are illegal in the USA (such as gambling).You can only trade bitcoins against dollars on Coinbase – they do not deal with other currencies or with altcoins.

Coinbase say they have expanded to 18 different European markets, but do not have banking or regulation in Europe, so any European dealing with them will have to send and receive euros via expensive wire transfers, though they have added funding by credit or debit card for UK members.

KrakenKraken.com bills itself as the biggest euro-denominated exchange, and was founded in 2011. However the company is California based, so it’s jurisdiction is the United States.The domain is registered as follows:JESSE POWELL625 S ST.SACRAMENTOCA95811USAJesse Powell is listed on Kraken’s website as CEO and co-founder of Payward Inc, the company that owns the Kraken website.According to Bloomberg, Payward Inc is based in San Francisco at the following address:548 Market StreetSuite 39656San Francisco, CA 94104-5401United StatesPhone: 650-434-2889Note they seem to be neighbours to the Coinbase people (same address different suite). Bloomberg lists Michael Gronager as the Chief Operating Officer.They have raised venture capital – $5 million was raised in March 2014.They trade Bitcoin against Euros, Dollars, Yen and Pounds, and also allow people to trade litecoins, dogecoins, namecoin, stellar, ripple and ven against bitcoin.Part of the reason they dominate the euro-bitcoin trade is because they bank in Luxembourg, which allows them to process Euro SEPA payments from European banks easily (deposits and withdrawals). They also bank in Japan which enables them to do Japanese bank withdrawals and payments. Dollars and Sterling require wire transfers and a higher level of verification. Note that people from Germany and Japan must have ID verification before they can use this exchange. Other Europeans just need name, address and verified phone numbers.

Bitstamp

Bitstamp.net is a European exchange based in Slovenia.Their domain is registered as follows:Nejc KodicWeingerlova 8aSencur4208SIBitstamp’s website lists offices in the UK, Luembourg and the United States, but it is thought these are the official registered offices for company listings, and the business itself operates out of Slovenia.Verification is tough on this exchange – this is rumoured to be at the request of their banks, which are Slovenian based (some Slovenian banks have been bailout by the Slovenian government and all banks there are being cautious in case they too need help).Note there have been issues with some European banks blocking SEPA transfers from Bitstamp’s bank – see the following thread for up-to-date information about which particular banks have issues.Their exchange allows trade of bitcoins against dollars only.

BTC-E

BTC-E is the oldest surviving bitcoin exchange, (they were founded in 2011 before Kraken). No-one actually knows who owns them or where they are based.Their domain registry is private – and the privacy organisation that handles all their mail is based in Auckland, New Zealand. However, in the past, their domain has been listed as belonging to Svetleichi Dmitri, with an address in Russia. There have been some rumours that they operate out of Bulgaria, but no-one has been able to pin down an address.Some criminal types have tried to use this shadowy exchange to tumble and withdraw their coins, but BTC-E is clearly keen to discourage this behavior – recently they traced and halted the withdrawal of stolen coins – however it is not clear what then happened to those stolen coins, all we know is that the thieves were unable to cash out.You can trade bitcoins against dollars, euros and roubles, as well as altcoins like litecoin, namecoin, novacoin and peercoin (they are very old school – they’ve refused to add any of the new altcoins launched from 2013 onwards). To trade there, you need to use wire transfers or Western Union.

Final Note

Please note that all the above exchanges charge fees for trades, that is how they earn their money. I have omitted the fee-less Chinese exchanges on the basis that where there are no fees, you the customer are the product (either your information is likely to be sold, or the exchange uses coins you have deposited to trade against you). If something seems too good to be true, it is! Be safe out there.

It's now exactly a month since I started this experiment. My "initial trading capital", obtained from bitcoin faucets stands at 306715 satoshis. I had hoped to get more in the last week, but most of the faucets pay out through microwallet, which seems to have stopped paying in the last two weeks, citing endless problems. It's possible they'll disappear taking the faucet money with them, leaving both the faucet owners and the faucet users stranded. We shall see if I eventually get my hard won satoshis. In the meanwhile I'll have to work with what I've obtained so far.

I have made 57319 satoshis from trading, after trading fees. Which represents an 18.68% return - which is not bad for a month's work!

Some of the trades that I put on weeks ago have finally executed - eg the sell of mintcoins. See screenshot at the bottom of the page - it took ages for the buy order to execute and then ages for the sell to execute. But the profit was 33% - so not bad, even though I only traded a small amount, due to the risk of trading something that low priced (coins that low have a tendency to fall so far down they are demoted to litoshi status). Anyway, have reinvested my profits into another mint trade - lets see what happens.

Another slow moving coin is mazacoin - see screenshot below. I waited seventeen days for it all to play out. Other coins like digibyte are much faster moving - as the screenshot shows, I was able to place several trades in one day. Sadly digibyte is in the midst of a pump at the moment, so I dare not place any more trades because I don't want to be caught out in a dump. I prefer the stable coins that seem to go nowhere moving just a couple of satoshis up and down.

As I keep reinvesting my profits, I hope to compound my returns. It will be slower than I hoped because not sure I'll get more faucet money in the near future - but that's one of the obstacles you run into real life.

It's now three weeks since I started this experiment. My "trading capital" from the bitcoin faucets stands at 287344 satoshis and my profit after fees is 38,758 satoshis, which is a 13.48% return.

Most of that return came from trading DGB. Reddcoin sell orders seem to take a whole week to execute, so I've only managed a few trades there, and other sell orders like Mint and DVC are still waiting to execute - however because the trading capital on those experiments is small (about 10,000 satoshis) I'm content to just wait it out.

But it goes to illustrate how important risk management is - I'm only risking small amounts on each trade. If I'd gone all in on Mint, I'd be twiddling my thumbs with no profit to show yet...

It's now two weeks since I started this experiment. My "initial trading capital" from faucets stands at 204920 satoshis. And I've made a trading profit after fees are deducted, of 16027 satoshis. Which is a 7.8% profit. Not bad considering that it took some time for the bitcoin faucet money to come through - the first five days of this experiment I was trading with miniscule amounts from altcoin faucets.

My biggest success has been trading Digibytes - despite only trading a small amount, due to the high frequency the trades are executed, the profits come in quickly, and I can then turn it round and reinvest, over and over.

Devcoin has been the poorest - my buy executed, but am still waiting for the sell to execute. It's a waste of time because it ties up trading capital. Once the sell executes, I'll stop trading it. My Mintcoin buy order is still waiting to execute - am going to wait it out because the potential profit from the 1 sat move outweighs tying up the money.

Finally, it takes money to make money, so I shall be hitting the faucets again hard, to get some additional capital to trade. Hopefully compound interest (from reinvesting the gains) and trading the initial capital over and over, will do the rest.

I hit a bit of a glitch on Cryptsy yesterday, because their site was down all day, so no trades could execute. Nevertheless, have been receiving dribs and drabs from the bitcoin faucets - my "initial capital" from the faucets now stands at 157151 satoshis.

Some trades did execute - my Reddcoin sell order finally executed, and I was also lucky enough to sell DGB at two satoshi higher than I bought it for, giving me a profit of around 11% (the buy order executed while I was asleep, and by the time I logged in, the price had gone up so I could sell straight into someone else's order, rather than placing a sell order myself). Screenshots below.

I'd like to talk a bit about risk management - even though I'm funding this with "free" faucet money, it's very hard work getting it, so of course I don't want to lose it, I want to use it well and profitably.

Most of the risk in altcoins involves buying at the top and becoming a bag holder. However, all the coins I have selected for my satoshi swing trade strategy are in the low teens - none are worth more than 20 satoshi. I am effectively playing the spread - so if the buy price is 14 and the sell price is 13, I place a buy order at 13, hoping someone will sell into it, and when it executes, I place a sell order for 14 hoping a buyer will take the order. Sometimes as with the Digibyte above I get lucky and the price moves up so I can execute instantly - but usually it's a tedious job of placing orders on both sides and patiently waiting for them to be filled.

Also, because the coins are all low priced, they are sometimes subject to pumps. Am not really interested in pumps, the value for me is insurance - I know that if the price falls a couple of satoshi after my buy order has executed, it will get pumped back to where my sell order is, so no need to panic. When there are pumps (there was a small one last week sending Noblecoin from 8 sats to 20 sats and down again), I always wait for it to settle right back down again before placing my buy orders. Look at the baseline for the "natural" price.

The other thing you should do is not risk your whole stash on just one coin. At present about half my stash is on Reddcoin, which is too much. However, Redd is one of the most stable coins due to the huge buy walls that are underpinning the price. Still, I want to try to spread the risk about so that I have lots of potential avenues of profit.

Have tried something new with the new faucet money I received - Mintcoin. Have placed a buy order for 3 satoshi, and if it executes will sell for 4 satoshi. If it comes off that should give me a 33% profit - so am eager to see if risking a small amount on a coin like that is worth it. Because I'm using faucet money and am only in the first week of my experiment, I'm playing with piddly money anyway, so why not take a small chance?

Got some more BTC from the bitcoin faucets - see screenshot at bottom of page. The "capital" received now stands at 138421 satoshis.

Lots of my buy orders have now executed - including the Reddcoin one at long last. Am now waiting for the sell orders to execute. With some coins such as Digibytes and Noblecoins, the sell orders have already executed - see screenshot below.

As per my plan, I have simply placed new buy orders for those coins. Once the sell order on Reddcoin executes, I might decide not to trade that coin anymore. As I am only trying for a small 5-8% profit on each trade, it's important they execute quickly. If I have to wait a week for a buy order to execute and then another week for the sell order, and all for a measly 5% profit, I'm just never going to get anywhere.

So far the coins I've tried have been Reddcoin, Noblecoin, Digibytes, Devcoin and Mazacoin. Noblecoin and Digibytes look promising for a quick turnaround.

Payments from the bitcoin faucets are now coming in thick and fast - see screenshot at bottom of the page. My "capital" from the faucets now stands at 99007 satoshis.

However, the buy orders I have placed are simply not executing! This is a slooooow business while I wait for it to happen. I have decided to try out the "satoshi-swing-trade" on a few other coins to see if they execute quicker. So have placed buy orders on Devcoin (DVC) at 10 satoshis and DigiByte (DGB) at 17 satoshis.

Lets see if they execute quicker than the Reddcoin and Noblecoin buy orders. If they do, I might switch to trading those instead. I wouldn't mind trying Doge again (the only coin where I've managed to execute both a buy and sell for a small profit), but it requires a different strategy from the mechanical "satoshi swing trade" I am attempting on other coins.

I received payment from the bitcoin faucets thankfully - as you can see from the screenshot at the bottom of the page they yielded rather more than the altcoin faucets did.

I placed another trade to buy reddcoin at 13 sats but despite what I said about Doge yesterday, I couldn't resist putting a small amount to buy Doge at 73, as it had suddenly plunged and I thought it might go back p just as suddenly.

My trade to buy at 73 executed quickly, and I placed a trade to sell at 77 (a roughly 5% profit). As you can see from the screenshot, that executed within nine hours - giving me my first tiny profit! I've reinvested the proceeds in another buy order at 73 sats.

So to summarize, the "capital" I've received from faucets stands at 61479 satoshis. I now have three buy orders that haven't yet been executed, two on redd and one on Nobl. See screenshot below. Because Cryptsy executes in the order they were placed, I'm just going to leave them in the queue. Hopefully I should get new faucet money coming through to make new orders.

Conclusion after three days: this is slow business, mainly because I haven't got much capital and mainly because the markets (apart from Doge) arn't very deep so it takes a while for orders to execute.

The trade I placed yesterday hasn't been executed yet - there is a tremendous buy wall at 13 satoshi for Reddcoins.

Therefore for my next trade I thought I'd try the "satoshi-swing-trade" strategy on a coin with smaller walls so the trades get executed quicker.

I've placed a buy order to buy Noblecoin at 9 satoshi. I'll then sell it for 10 satoshi which should give me an 11% profit (the satoshi swing trade strategy only works on coins priced in the low teens - it wouldn't work on Doge - buying at 77 sats and selling at 78 sats would only yield a 1.29% profit).

So anyway, I now have two trades placed - a buy for RDD at 13 sats and a buy for Noble at 9 sats.

My total "capital" is 11289 satoshis. See the following screenshot - the BTC amount is the new money I've accurued by selling alts yielded from alt faucets, the points are from selling the alt drips to get btc. The BTC estimate at the bottom is the total I have and includes the money held on the trade I placed yesterday.

The benefit of the altcoin faucets is that they pay out immediately. the drawback is that they drip pitifully small amounts in satoshi terms - you could spin your wheels for hours filling in captchas just to get a few cents worth. The bitcoin faucets drip much more, but they payout once a week on sunday and monday.

My grand total from the altcoin faucets is 5825 satoshis! Pitiful but enough to do a trade. Hopefully by next week I'll have more to play with when the bitcoin faucets pay out.

Have decided on a "satoshi-swing-trade" strategy. That is, I'm going to trade Reddcoins for a 1 satoshi difference. So today I placed a buy for a 13 satoshi price. When it executes, I'll place a sell for 14 satoshis. This should give me a profit of about 7.7%. Then rinse and repeat - put the money from the sale back into a buy order at 13, and then sell at 14.

Obviously the market may move against me - but I'll just place new trades at higher or lower prices and leave existing trades to wait it out to execute. As long as I stick to the mechanical "always sell at one satoshi more than I buy" I should make a profit. Compounding should do the rest as I reinvest what I make.

Meanwhile, here's a screenshot below of my initial "capital". I intend to keep a running total of the faucet amounts I collect so I can see how much I got and how long it took to collect. Until tomorrow, ciao.